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News Dec. 19, 2018

Labor shortage could lead to years of rebuilding backlogs after Camp Fire

During the destructive and deadly Camp Fire in Northern California's Butte County in November, 13,972 homeowners lost their residences. For those who decide to rebuild, it may be years—or even a decade—before construction begins, according to the San Francisco Chronicle.

With infrastructure destroyed and large portions of the town of Paradise, Calif., still closed off to the public, homeowners face uncertainty regarding insurance money; when water or power might be restored to their neighborhoods; and when county authorities will deem their land safe for rebuilding.

Homeowners also face a shortage of construction workers in the region that could lead to what Butte County builders warn could be years of backlogs. The county reportedly only has a fraction of the building trades workers or companies needed to rebuild so many homes and commercial and institutional buildings.

Census figures from May 2017 estimated Butte County had 2,940 workers involved in the "construction and extraction" trades. The Valley Contractors Exchange, which represents construction trades in the county, says there are 346 licensed contractors employing 4,000 workers, some of whom live outside the county.

About 1,400 of those workers lived in Paradise, and it is unclear how many of them will be able to find housing in the area so they can stay to help rebuild.

Contractor Bob Smalley lost his house in Magalia, Calif., but had an apartment above his workshop that survived. However, 11 of his 12 construction workers lost their homes to the fire; several workers are staying temporarily in RVs parked in Smalley's work yard.

Brannan Hankins, an electrical contractor in Chico, Calif., said the "consensus is that it will take four to five years to rebuild the infrastructure in the worst hit areas." The homes of four of his workers were destroyed by the fire.

"We already had a shortage of labor force because of the amount of work in Chico," Hankins said. "Add to that the Redding fire last summer and Santa Rosa fire last year, and the problem has become worse."

Rebuilding likely would require significant help from companies outside of Butte County. Of the 5,600 homes destroyed in the Tubbs Fire in October 2017, which was part of the fires that hit Sonoma, Napa and Lake counties, only 200 homes have been rebuilt and reoccupied, with another 800 under construction and expected to be completed by the end of 2019.

Construction costs were about $140 per square foot before the Camp Fire, but demand, the labor shortage and new code requirements could cause those costs to double; at $280 per square foot, a new house in Paradise could cost $336,000 to build—nearly 20 percent more than the average home price before the fire.

"In Sonoma County, the cost of rebuilding was so high for a lot of people it wasn't worth it," said Selma Hepp, an economist for the real estate brokerage Compass in San Francisco. "I think that will be the trend generally with California wildfires, even in less-expensive areas like Butte County."

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